Broadband tariffs may go up under new proposed license framework

Rates for internet and broadband services are likely to increase, under the new license framework proposed by the Department of Telecommunications (DoT), owing to a high entry fee for national level unified license.

The tariffs of broadband and internet services in India could be heading skywards soon, if the proposed license structure is implemented. The Department of Telecommunications (DoT) has proposed a one-time license fee of Rs. 15 crore, as compared to the Rs. 30 lakh that is applicable at present.

“If internet service providers opt for the UL, then the cost of internet and broadband services will go up," said Rajesh Charia, President of Internet Service Provider Association of India (ISPAI).

Under the proposed licensing regime, DoT will allow service providers to offer internet telephony (VoIP- Voice over Internet Protocol) service, which will help offer low cost call services in rural areas. In 2010, private players - Reliance Infotel Broadband, Tikona Digital and Augere, had won BWA spectrum, and the committee has given the recommendation the ISPs with wireless broadband spectrum (BWA) be allowed to provide voice telephony service, but has left it to the higher authorities to take a call on whether these companies need to pay the Rs. 1,650 crore extra.

The government has given the option of continuing with the old license format, which runs in parallel with the new national level UL that will cost Rs 15 crore. All licensees who wish to offer any additional services will have to migrate to a unified license. For example, Reliance Infotel had acquired Wireless Broadband Spectrum (BWA) spectrum and an ISP license in 2010. But the company will have to pay Rs. 1,650 crore if it wants to offer voice services using this spectrum. The existing license does not allow that.